Finance of America (FOA), a leading reverse mortgage lender in the industry, reported another loss in the second quarter of 2024. However, the company made progress towards profitability by improving its loan volume and revenue, according to its Q2 2024 financial results and statements made during an earnings call this week.
Overall Financial Performance
In Q2, FOA’s funded loan volume increased to $447 million, up from $424 million in Q1 2024, showing a 5% quarterly improvement. Year-to-date, FOA recorded $871 million in loan volume compared to $804 million during the same period in 2023. The total revenue of $79 million grew 5% quarter over quarter, with a significant increase in year-to-date revenues compared to last year.
Despite the improvements, FOA still reported pretax and net losses of $4 million and $5 million, respectively, in the quarter. These losses were reduced from Q1 2024 levels, and year-to-date losses were also significantly lower compared to the previous year.
CEO Graham Fleming shared that FOA continues to show improved fundamentals, leading to the fourth consecutive quarter of improved adjusted net income. He attributed the progress to a strategic plan focusing on operational strength and profitability, as well as the successful incorporation of American Advisors Group (AAG) into the business.
Stock Actions, Warehouse Lines, HMBS 2.0
Fleming discussed a recent reverse stock split to comply with NYSE listing standards and highlighted a debt exchange agreement to enhance financial flexibility. FOA also closed on two warehouse funding facilities with new lending partners to support proprietary loan production.
He expressed optimism about Ginnie Mae’s HMBS 2.0 program, which is expected to improve liquidity. Investors on the call praised FOA’s second-quarter performance, and the company’s stock rose during trading.
Overall, FOA’s strategic initiatives and financial improvements indicate a positive trajectory for the company moving forward.
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